Real Business

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“I usually make up my mind after looking at just two things: the executive summary and the P&L forecast,” he says. “If I can’t grasp the concept from the summary, I’m usually gone.  I look out for a well articulated summary that tells me what I can expect to get out of my investment.”

The best business plan summaries, he says, are those that have been kept to one side of A4 with bullet points. 

But he adds that the numbers in your business plan are also key. “I need to see where the money I’m going to invest will be spent, and how it’ll create value in the company.”

He says investors don’t like seeing money they invest go to existing salaries. “I need to see that I’m investing in growth. Bolster success, don’t feed failure.”

Hendrick says you should avoid focusing on revenue alone, though. “The most basic metric for business success is profitability, not revenue. Your business plan goal should be a profit figure but also – depending on your industry – a percentage operating profit of margin.”

“At the end of the day, there’s no stronger business plan than one where you let the numbers do the talking. But keep it simple, if you over-complicate your business plan, you’re asking for trouble.”

Your business plan isn't just a one-trick pony

Once you’ve written your business plan, try to keep it up to date – it can become a key management tool.

After using your business plan to raise finance and sell your idea, update the business plan regularly. You can use it to increase sales, enter new markets, evaluate your strengths and weaknesses, and much more.

“Don’t be afraid to go back and update it,” says O-Bit’s Breith. “You don’t have to sign it in blood, and changing circumstances will necessitate changes.”

Your business plan has to be seen as a blueprint to your business’s future, so you should adapt and review your business plan regularly.

“As a rule of thumb, you should revisit your business plan on a quarterly basis, or even more frequently if you’re seeking finance,” says Gary White, corporate finance partner at CBHC LLP.

“The more banks and third parties understand about the business – how it works, what the market is like, where the company derives competitive advantage, etc – the more likely they are to offer support.”

Business plans aren't state secrets

Finally, why not let your employees in on the business plan? It can help provide clarity to your business and keep staff motivated, knowing what they’re working towards.

“I can’t understand why so many senior managers want to keep it a secret from their staff,” says Stephen Wright, commercial director of the Institute of Sales & Marketing Management. “The usual justification is ‘what if the competition gets hold of it?’, but if the competition emailed over their business plan to you, would it make that much difference?”

It’s true: the risk is minimal compared to benefits your business could gain. All but the most disaffected staff are interested in the future of their organisation, so letting them in might help you achieve those goals.